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U.S. steps up response to housing crisis

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After gridlocking on a housing fix on Feb. 28, the Senate last week passed a bipartisan housing rescue package on an 84-to-12 vote. The plan includes $4 billion to help communities purchase and rehabilitate foreclosed properties and $13 billion in tax breaks for builders and new home buyers.

Also last week, the White House announced its own plans to beef up FHA involvement in the housing crisis.

But the most ambitious effort is unfolding in the House Committee on Financial Services, where Chairman Barney Frank (D) of Massachusetts is working up a comprehensive housing plan that aims to help 1.5 million families stay in their homes. The proposed bill, which is expected to be taken up in committee next week, gives the FHA authority to guarantee up to $300 billion in refinanced loans, if the lenders agree to reduce the outstanding principal on those loans.

"The FHA is the only agency in the federal government that can go into crisis mode and quickly help hundreds and thousands of people," says committee spokesman Steven Adamske.

On the campaign trail, Sen. John McCain, the presumptive Republican presidential nominee, launched his own housing plan following in the footsteps of Democratic candidates Sens. Hillary Rodham Clinton and Barack Obama. Until recently, Senator McCain had rejected a larger role for the federal government in the housing crisis.

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